There has been a lot of angst over the last couple of weeks about a potential banking crisis. There have been 4 failures so far: Silvergate, Silicon Valley Bank, Signature Bank, and Credit Suisse. The first of these hasn't been mentioned much because it was primarily associated with lending in the crypto market and, as far as I know, there [...]
A bank's assets triple over a few years when interest rates are low. The bank invests those assets in long-term, higher-yielding municipal bonds with little credit risk. Inflation flares up and interest rates rise, reducing the value of the municipal bonds and funding dries up. Regulators become concerned that the failure of this bank could damage public confidence in the [...]
Last week started with investors focused on Jerome Powell's testimony before Congress and any hints about future monetary policy. During the course of two days of testimony, which was deemed more hawkish than expected, the market priced in another rate hike and pushed out the possibility of a rate cut all the way to January 2024. The week ended with [...]
A few have asked, so I’ve written up what is actually a shorter piece on this SLR business is all about. First, SLR stands for Supplementary Leverage Ratio (and it’s not SLF, as I managed to leave two of the same typos in the main article referenced below, to the point the mistake made it into the headline). Parts of [...]
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